February 27, 2020 / 11:15 AM / in a month

Cambodia says 200 factories face production halt from coronavirus

PHNOM PENH (Reuters) - About 200 factories making mostly garments will likely suspend operations or slow production next month over a lack of raw materials from China due to supply chain disruptions caused by the new coronavirus, an official said on Thursday.

Labor Ministry spokesman Heng Sour told reporters about 10 factories with about 3,000 workers have already notified the government that they will partially suspend operations.

“From predictions as well as an actual survey about the impact of coronavirus, we know that in March nearly 200 factories will face a lack of raw materials and it will affect about 110,000 workers,” Heng Sour said.

Cambodian Prime Minister Hun Sen has promised tax breaks to garment factories hit by supply chain disruptions and higher tariffs after the European Union withdrew trade preferences over human rights.

He also said the government would help companies pay 60% of lost wages to workers if production is halted.

The garment industry is Cambodia’s largest employer, generating $7 billion for the economy each year, according to official data.

Travel restrictions and quarantines in China, the manufacturing engine that powers much of the world, hit movement of goods, with the lack of supplies reverberating throughout the global supply chain.

Writing by Kay Johnson; Editing by Hugh Lawson

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